Digitising the air freight industry — Creandum backs cargo.one ✈
We are very excited to announce that Creandum’s fund has co-led a $3.2 million seed round into cargo.one, together with our friends from Point Nine Capital. cargo.one’s early stage customer, Lufthansa Cargo, has also become a minority shareholder.
Freight is a segment on which Creandum has spent a significant amount of time– Creandum funds are big backers in the ocean freight platform Xeneta and we love how the best entrepreneurs can impact a major percentage of GDP in these industries. Seeing what cargo.one has built, we believe that now is the time for digital disruption to expand into air freight.
In a world where you can order hot food on your mobile phone and have it arrive on your doorstep, you would think that a major industry like air freight would be digital and fully automated. But that’s not the case.
Two decades ago, non-contracted air freight was booked directly at airports, with shippers and freight forwarders placing orders physically at the airlines' outlets day-in-day-out. Today we haven’t gone much further– this process takes place in centralized call centers or via email. In practice, this means countless phone calls and emails back and forth, with thousands of people sitting in offices to request quotes and capacities through email and telephone.
By the time that they received all quotes, capacities and prices might have changed. The process is inefficient, and a price comparison at one point in time is virtually impossible. In 2019, booking non-contracted air freight should not be super manual, labor-intensive and non-transparent!
Putting the pieces in place
cargo.one is fully digitizing the booking of spot market air freight. The company built a digital platform that allows freight forwarders to look up and compare live spot market offers 24/7. In addition, it is the only solution with a real time and guaranteed online direct booking option. cargo.one launched this spring, and in a short amount of time has already managed to win some of the most critical carriers. Among others, this includes the largest cargo airline in Europe, Lufthansa Cargo.
cargo.one is currently the only platform that can offer real live rates and direct booking options
For freight forwarders, this unique combination of features results in a streamlined process with less manual work, reduced costs, and full price transparency. Next to this, the improved access to the spot rates and routes in the market means that freight forwarders can benefit from selecting the best combination of route and price (e.g. slower route with stopover but better price) and can book what fits their needs best. This brings air cargo to the same level as a consumer booking experience: easy, transparent with a few clicks online. Freight forwarders can sign up within two minutes and use the product — billing is done with standard Air Waybill (AWB) ensuring a smooth process.
For airlines, the platform as well improves the booking process massively. But more than this the platform means an additional sales channel in two ways. First, it allows for the booking of last-minute idle capacity. And second, the platform efficiently onboard the long-tail of the freight forwarder market into their customer base. With over 1,500 freight forwarders in Europe alone, it is impossible for airlines to access all demand in the market. cargo.one is accessible to any freight forwarder, no matter how small. Both the last-minute capacity aspect and the optimized pooling of supply and demand lead to a higher utilization and yield for (cargo) airlines.
Our hypothesis
We are of the opinion that the air freight industry is ripe for digitization. The industry is in clear need of a future-proof solution, and cargo.one provides that 10x improvement versus existing technologies. Not only does their platform lead to better rates, lower operational costs (for both airlines and freight forwarders) and increased transparency — it also connects the long tail demand with the supply. Our hypothesis is that in the near future, nearly every airline and freight forwarder will need the solution to remain competitive in the market.
cargo.one is founded by experienced founders, who are all second- or third-time entrepreneurs. In this composition, they have worked over four years together, and among other companies, co-founded OptioPay together. We think that they have the right expertise in building up enterprise sales. We are impressed with the fast execution speed of the team as they simultaneously on-boarded the first key airlines and freight forwarders onto their platform. The engagement from the first customers is very promising, with many repeat bookings. Additionally, we’ve seen the platform spread organically within organizations as another major proof.
We are thrilled to work with and support Moritz, Oliver, Mike, and team over the next years on their mission. Want to be part of this exciting journey, the team is hiring for various positions in Berlin (check here)! 👊💪
